Student property is different to regular residential property

Rental growth in student property is driven by student enrolment numbers. The annual number of domestic high school students reaching tertiary education is increasing by 19% over the next 3 years. International students have also begun to return to New Zealand and are likely to reach their pre-pandemic levels within several years.

It has also been found that during economic downturns more people usually see returning to school to earn additional qualifications as an attractive alternative to struggling to find work in a dismal job market. Financial assistance is offered by the government to support students’ accommodation costs while they study.

These conditions highlight the difference between student property and regular residential property, and how a surge in student enrolment numbers would put upward pressure on rent and student property values. More information about domestic and international trends in student enrolments can be found in the Prime Campus Presentation and Information Memorandum (available under the ‘Key documents’ tab above).

Prime Campus’ value creation strategy

The Prime Campus team collectively has 21 years of experience in managing and investing in student property. We create value through the combination of having a deep understanding of what matters most to students when they select a flat and how to identify value accretive purchasing opportunities.

At different times during the economic cycle, we acquire, renovate and optimise our portfolio of student property to maximise its value. We use specifically designed technology to actively engage in this process more efficiently than most private investors to produce long-term sustainable returns, while improving the lives of students.

More information about our investment process can be found in the Prime Campus Information Memorandum.

Past performance

Over the last 16 years, Prime Campus has established a portfolio of twelve student flats in Dunedin and Christchurch, currently generating annual rental income of $583,641. The portfolio property has a combined registered value of $10.74m, with a 42.7% loan to value ratio. Equity in Prime Campus Limited has achieved a compound annual growth rate (CAGR) of 37.5% between 2002-2022.

Prime Campus’ premium turnkey rental packages provide convenient high-value furnishings and services that support student tenants flatting for the first time. We have achieved 100% occupancy for the following year 10 days earlier each year on average since 2011 (235 days in advance for 2024 tenancies). At the same time, our premium to the market continues to grow beyond our eight-year average of 27%.

More information about our past performance can be found in the Prime Campus Information Memorandum and Presentation. The most recent performance information can be found in our most recent Quarterly report. All documents are available under the Key documents tab above.

The opportunity

This offer is open to all investors on the Catalist Public Market. It is a way for young people to gain exposure to the housing market to build wealth towards their future first home deposit, as well as a way for families to invest in their children’s/grandchildren’s student accommodation costs. At the same time, the investment directly contributes to improving student housing. Until now, this opportunity could only be accessed by private investors with large financial resources.

Prime Campus’ founder, Tim Calder, invested in his first student flat in his first year of university. Over the following 21 years, he has gone on to compound his investment by 37% per annum. His investment in student property provided him with more opportunities that come with having access to greater financial resources. Tim has worked closely with thousands of students throughout their flatting experiences and through this fund, he has developed a way to provide young people with the same opportunity to establish themselves as he did.

Prime Campus has refined its past investment strategy for the changing global landscape and is confident about its sustainable future equity growth at a long-term average of 15% per annum. While our long-term loan-to-value ratio (LVR) target is 50%, unless we are confident that we can reach our targeted returns using leverage without tax deductibility in a high-interest rate environment, it is expected that borrowings will not increase. On reaching $50m of Assets under management (AUM), Prime Campus will consult with shareholders regarding the establishment of a regular distribution policy.

Expected auction schedule

Prime Campus Limited intends to hold capital raising events approximately twice a year, plus two secondary market trading auctions per year, which are expected to be in June and January. Indicative valuation information will be provided for the portfolio property to inform an indicative price range for the shares.

Although the purpose of any secondary market auctions is to give existing investors the opportunity to trade their shares, if there is more demand to buy new shares than the supply of shares from existing shareholders, Prime Campus Limited may decide to issue additional shares at the clearing price established by the auction, or at a fair market price set by the directors and informed by the carrying amount at that time if no shares have been offered for sale, in order to satisfy excess buy orders and ensure prospective investors don’t miss out.

If Prime Campus Limited decides to issue new shares in a secondary market auction, it will do so only to fulfil excess buy orders, and only if its directors are satisfied that the issue price is fair and reasonable for the company and its existing shareholders. Any potential new shares will only be issued after all existing shareholders’ sell orders at the clearing price have been completed to ensure existing investors have first priority and the best opportunity to trade their shares if they wish to do so.

Please read the Prime Campus Information Memorandum and Quarterly updates, available under the Key Documents tab for full information about this investment. Updated information on Prime Campus’ property portfolio will be provided prior to each periodic share auction.

The Prime Campus team

Our team is passionate about student property and driven to maintain the leadership we have established over the past 21 years in this field.

We have direct experience in the student property industry as tenants, property managers, investors and developers, as well as extensive knowledge in construction, digital communications and software engineering.

Our team’s rich diversity enables Prime Campus to genuinely connect with our student tenants, understand the underlying real estate potential and continue to develop leading premium flatting experiences.

For further information on our fund structure and the team, please see the Information Memorandum in the Key Documents tab.

How to invest or trade

You will see the investment details at the top of this page when an auction is open. Please click the Invest (for a capital raise), Bid (to buy in a secondary market auction) or Offer (to sell in a secondary market auction) button in the green box near the top of this page, as relevant, when an auction is open.

Please don’t hesitate to ask for help if you are unsure about how to do something. If you have any questions about using the Catalist platform please check our FAQs or contact Catalist at hello@catalist.co.nz.

Property investment carries inherent risks, as with all financial products, which may affect the performance of this investment. For more information about the risks, please refer to our Risk and Mitigation section of the Information Memorandum. Investors are encouraged to ask questions and seek independent advice.

Prime Campus Limited has resolved to opt-out of being a “Code Company” under the Takeovers Code. See the Information Memorandum for further details.